Friday, December 8, 2017

Blacklist May Affect Portugal-Macau Relations

Fearsome things come in small packages

Macau’s inclusion on a European Union (EU) tax blacklist of 17 countries and regions has made the front page in the Portuguese financial daily “Jornal de Negócios”, which indicated that bilateral relations between Portugal and the MSAR could be affected.

Deputy secretary of state Ricardo Mourinho Félix was quoted as saying that the Portuguese tax haven list – which does not include Macau – “must be collated with the European list.” According to “Jornal de Negócios”, trade between Portugal and the listed countries and regions could be disrupted and affected by higher taxes.

Reference newspaper “Público” also reported on the list, claiming that “Macau’s image as a place that favors gambling and tourism, and where the casino neons are omnipresent, is going to have the burden of another image, less beneficial to its reputation.”

The EU said that the listed countries and regions could potentially face sanctions for failing to bring their standards in line with the bloc, at a time when the bloc is seeking to step up its fight against opaque practices that facilitate tax avoidance by multinationals and individuals.

The European Commission – the EU’s executive arm – says that the threat of being on the list can itself incentivize countries to bring their tax systems in line with EU standards, for fear of being named and shamed. The countries that make commitments to tax transparency will be subject to monitoring by the EU over the coming year. The bloc plans to update the list at least once a year.

But some countries, including France, have said that listed jurisdictions should also face sanctions. Potential countermeasures applicable at the national or EU level could be introduced, including the freezing of some EU funds.

“We want this list to be complete and effective. No state should escape responsibilities when it doesn’t firmly combat tax evasion,” French Finance Minister Bruno Le Maire said on his way to the meeting where the blacklist was approved. “This list needs to be effective, meaning that it needs to allow us to impose sanctions so that those who don’t respect rules will change their behavior.” (more...)